The Relationship between Analyst Coverage and Overinvestment, and the Mediating Role of Corporate Governance. Evidence From China

IF 1.7 3区经济学 Q3 BUSINESS, FINANCE

Journal of Behavioral Finance Pub Date : 2022-02-12 DOI:10.1080/15427560.2022.2037601

Chia-Hsien Tang, Yen‐Hsien Lee, Wanying Lu, Li Wei

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引用次数: 1

Abstract

Abstract This study applied a quantile analysis to test the relationship between analyst coverage and overinvestment in Chinese firms and further sought to demonstrate the mediating effect of corporate governance on overinvestment. The empirical results show that analyst coverage causes overinvestment across all quantiles; however, corporate governance can diminish the effect of firm overinvestment in the higher quantile analysis. Additionally, the difference-in-differences method was used to explore the effectiveness of the Chinese government’s 2013 corporate governance reform, with the results confirming that that governance reform has been effective in inhibiting a firm’s overinvestment. The findings of this study indicate that analysts act as market supervisors in the Chinese capital market, improving corporate governance; however, their coverage does not appear to benefit firms or shareholders. This research highlights the need to review the role of analysts in the market to ensure they can reduce information asymmetry between managers and shareholders without causing overinvestment behavior.

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分析师覆盖与过度投资的关系及公司治理的中介作用。来自中国的证据

摘要本研究采用分位数分析方法检验了中国公司分析师覆盖率与过度投资之间的关系，并进一步试图证明公司治理对过度投资的中介作用。实证结果表明，分析师覆盖导致了所有分位数的过度投资;然而，在高分位数分析中，公司治理可以降低企业过度投资的影响。此外，运用差中差法对中国政府2013年公司治理改革的有效性进行了探讨，结果证实了治理改革在抑制企业过度投资方面是有效的。研究结果表明:在中国资本市场中，分析师扮演了市场监督者的角色，改善了公司治理;然而，他们的报道似乎并没有使公司或股东受益。这项研究强调需要审查分析师在市场中的作用，以确保他们能够减少管理者和股东之间的信息不对称，而不会导致过度投资行为。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Journal of Behavioral Finance Multiple-

CiteScore

4.60

自引率

10.50%

发文量

期刊介绍： In Journal of Behavioral Finance , leaders in many fields are brought together to address the implications of current work on individual and group emotion, cognition, and action for the behavior of investment markets. They include specialists in personality, social, and clinical psychology; psychiatry; organizational behavior; accounting; marketing; sociology; anthropology; behavioral economics; finance; and the multidisciplinary study of judgment and decision making. The journal will foster debate among groups who have keen insights into the behavioral patterns of markets but have not historically published in the more traditional financial and economic journals. Further, it will stimulate new interdisciplinary research and theory that will build a body of knowledge about the psychological influences on investment market fluctuations. The most obvious benefit will be a new understanding of investment markets that can greatly improve investment decision making. Another benefit will be the opportunity for behavioral scientists to expand the scope of their studies via the use of the enormous databases that document behavior in investment markets.